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Thursday, January 16, 2014

Europe's welfare spending is its strength, not its weakness

Don't listen to George Osborne. His idea of reforming the EU from within to compete in the 'global race' would undermine its very success

In the debate about Europe, it is easy to become so polarised about the question, "is it better to reform the EU by collaboration or by threat?", that one fails to look at the actual reforms being proposed. I am guilty of this myself. Faced with such incredible hostility to the European project as a whole, I find myself cornered into a position of defending the European project as if my life depended on it. In fact, as a Greek citizen who has chosen to study, work and live in the UK for nearly all of my adult years, my life does depend on it.

The truth is that seeing the economic misery the troika has bestowed on my country of birth, I hate much of what the EU has become as passionately as the most avid Eurosceptic. I just don't think that the fragmentation of this continent into suspicious nation states, hostile to each other – because, make no mistake, that is what a break-up would bring – is the answer. A change would be unlikely to bring the democratic utopia that some suggest.

I watched the chancellor George Osborne's speech on Wednesday about reforming the EU from within. Predictably, the debate that has followed stays within these polarised parameters of accepting it as brave or dismissing it as "bunkum", and has failed to look at the content of the reforms being proposed.

Osborne zeroed in on helping Europe to compete in that much-tortured catch-all: the global race. But what is it a race to and how does one "win it"? His focus is on reducing borrowing, cutting taxes, capping welfare and controlling immigration. He berated the fact that Europe accounts for only 7% of the world's population, 25% of the world's economy, but 50% of global social welfare spending. It is presented as somehow obscene that the nations of this continent spend so much on keeping their citizens healthy, safe and educated. The chancellor makes the explicit link between this and falling behind globally. These overtures confirm what has been clear to many for a while: that austerity is not a temporary response to a crisis, but a permanent adjustment of expectations and living standards for the majority.

A more plausible explanation might be that, as emerging economies develop and their educational and living standards rise, they participate more prominently in innovation and have a global economic share more commensurate to their size. Instead, the idea is pushed that our workers' salaries, living standards and working conditions need to descend to meet those of the sweatshops of Indonesia if we are to prevail. That in order for business to win, people have to lose.

This is my objection to the reforms being proposed – whether from the inside by threatening exit, or by exiting and heckling from the sidelines. It is not blind Europhilia to observe that, in a race to talk the toughest on Europe, we risk throwing the baby out with the bathwater. Or even worse, throwing the baby out and keeping the bathwater. Because, even those mooting exit foresee a scenario where the UK remains part of an EEC-type single market. In short, what is being proposed is a format of the EU that still benefits large corporations – setting up their affairs to sell in the UK but pay tax in Luxembourg, merging so that they can create European oligopolies in energy, media and travel and a dogged resistance of regulating the financial sector – but no longer affords any protection to its citizens.

Europe-wide austerity, attacks on the protection of individuals by the ECHR, welfare reform, relaxing of business regulations, streamlining dismissal procedures, anti-immigration hysteria, making it more difficult for unions to take industrial action and the dumping of environmental controls on industry, are all part of that same nexus.

The fact that as a continent we have embraced values of social security and solidarity, a high standard of education and health for all, and dignity in old age, should be celebrated. The weakening of those values will further increase the shift of power from the elected to the corporate. They are not the cause of our failure in competitiveness or innovation. They are, instead, the reason for our extraordinary and disproportionate success. They are not why we are losing the global race. They are why we have been winning it, against the odds, thus far.

European UnionGeorge OsborneEuropeGlobal economyEconomicsWelfareAlex Andreoutheguardian.com © 2014 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds


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